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Thursday, 24 April 2014

South Met. Co-partnership Scheme 2

This extract from my M.Phil thesis (Thames Poly 198something) is a continuation of the posting below - South Met. Co-partnership Scheme Part 1. Hope to put the rest up soon and sorry for the break in continuity

As the scheme progressed and grew after 1889 it can be seen
that its concerns fall into two areas - control of the workforce, the incentive
to self-discipline among them, and consultation.

From the start agreements could be used to select and
control the workforce, the Co-partnership Committee could be used as a means of
participation while holding control of the labour process firmly in
management's hands. Later changes included the sales of stock as a means of
further control through withholding privileges from dissidents. At another
level of participation was the worker director scheme. Such means of
controlling the workforce through welfare provision was becoming common in this
period. Helen Jones’ study of welfare provision between the Wars remarks on
this and describes it as the 'principal motive behind employers' welfare schemes'.
[Helen Jones. Employee Welfare Schemes and Industrial Relations in Inter-war
Britain. Business History March 1983

As we have seen, initially agreements arranged for a sum of money
to be kept in hand as a guarantee of good behaviour and each employment was
made a term of fixed contract which meant that the act of striking would
involve both legal proceedings and loss of money. For many workers the risk of
these penalties was well worth a guaranteed year's work with the promise of an additional
lump sum.

In 1889 Livesey had been to some lengths to say that he was willing
to co-exist with unions - 'he had not one word to say against unions which were
properly conducted'. [Times. Report Feb.
1890]

Will Thorne changed all that - or perhaps Livesey was
looking for an excuse. In February 1890 Thorne made a speech at Plymouth. He
said that the strike at South Met. was a failure but that next time the Company
would not get seven days notice, the men would come out at once and risk the law.
Livesey then said that he would have nothing more to do with an organisation which
was prepared to break the law to further its demands. The agreements were
changed and men thenceforth had to sign to 'say' that they were not members of
the Gas Workers Union. The two unions banned in this way were the Gas Workers
and the Coal Porters. Men were, however, not excluded if they had been members
in the past.

In 1889 all who wanted to sign agreements were encouraged to
do so but as time went on the granting of agreements to individual workmen as
an incentive was used -they were not given to those of whom management, for one
reason or another, disapproved.

In the first year of renewal agreements were refused to some
men who showed a 'spirit of insubordination' and this policy was continued. In
later years agreements were refused to those who 'showed a want of interest in
their work' or, as Livesey told the workforce in 1906, through one of two
reasons ' careless or indifferent work and selling stock by
withdrawing bonus'. Refusal was
thus a policy which gathered momentum - it became more progressively easier to
be refused as time went on. In the 1890s refusal for lack of interest and
insubordination had been extended to refusal for lack of thrift; by the 1900s
it was extended to 'men who persistently withdrew their bonuses or who sell
their stock to outsiders - publicans or loan offices. [George Livesey. Profit
Sharing. A Vindication. Economic Review.Nov. 1900]

Livesey explained that the granting of an agreement was one
of the most important steps that could be taken against a workman and

'the control of
agreements must be held by the Chief - it involves the question of absolute
justice'. [George Livesey. Employed, Employers and Copartnership.Labour Co-partnershipJan/Feb 1901]

These remarks were made in a lecture given in 1906 to fellow
gas managers and he used as an example the setting up of a scheme in the South
Suburban Works at Bell Green. No provision was made there to renew -agreements
discriminately and 'I was greatly disappointed' • Pointing to the carbonising
figures he said that .they showed how that if agreements were renewed
selectively they 'improved' - thus showing his audience the economic basis of
what had become not only an incentive system but a means of selecting only
suitable workers. - 'if he gets no agreement his ultimate fate is to leave. [Livesey.
Employed, Employers etc.]

This' course of action was, of course, criticised. In
"Profit Sharing; a Vindication" Livesey described how he had been
tackled on this question by A.J.Mundella during the course of a sitting of the
Royal Commission on Labour. [Livesey Vindication].In order to demonstrate his point he had
called together a meeting of the Profit Sharing Committee to discover their
opinion of agreements;

- 'the earnestness
with which they urged me not to interfere with the agreements in any way was almost
pathetic - they are regarded as a privilege by the men’ [Livesey. Vindication]

The value to the
workers was of course in job security given by the agreements

'I hope so to
conduct myself and not to do anything to the detriment of the Company by
signing the agreements the Company guarantees to find me employment for the next twelve months'. [Livesey
Vindication]

The question must obviously be asked as to whether this
method of controlling and selecting the workforce meant that militants were
being deliberately weeded out.

Management said that grievances should be channelled through
the
means set up by them for that purpose. The
Profit Sharing - later Co-partnership - Committee was set up
after the "Interview'. A consultative process was part of the initial
plan. Livesey had said:

'the idea is that as
soon as possible a Committee to be composed of equal numbers of workmen
selected by themselves and Officers chosen by the Directors presided over by
the Chairman of the Company shall be formed to settle all details'. [Report of the proceedings of an Interview…..
pub South Met Gas Co. 1889]

This Committee soon became a means of communication between
Company and participants in the profit sharing scheme - in due course most of the
workforce. Although its structure changed during the succeeding forty years -
it included women during the First World War - it remained much as it was set
up. Elected members retired by rotation and complicated rules ensured that a
quorum must always include a majority of workmen together with the Chairman's casting vote. –

It became customary
for the workmen representatives to have a pre-meeting without the management
representatives who, in any case, must never be in a position to outvote them.

Speaking in 1899 Livesey described its aims as more than
merely consultative:

'it has been a
powerful means of promoting mutual confidence and educating the men" [Livesey. Newcastle Interview]

In his view men always accepted management's view if it was reasonable.

'if a request could
not be granted the Committee had been told plainly and the reasons stated and always
with the same result” [Livesey. Newcastle Interview]

Thus the work of the
Committee had two aspects - one consultative; the
other the reconciliation of grievances. In
the early 18905 Livesey had asked for the opinions - as we
have seen in the instance of the agreements - and in time he enlisted their aid
on political questions on which they could provide an effective lobby. Fay says:

'it was the Co-partnership Committee which in 1897
settled and presented to the workers for acceptance the rules of the Accident Fund.
its most recent task has been provided
by the National Insurance Act'. [C.R.Fay.Cop-partnership in Industry.London
1913]

Emloyers Liability legislation was a matter in which
Livesey was concerned to lobby Government and the Co-partnership Committee
members duly made a statement against the legislation and lobbied Parliament. –

Once legislation had
been enacted the Committee took decisions on its implementation in the Company.
In the First World War the Committee took decisions of principle on the way
that war work was organised. [Co partnership
Journal] For example, they decided that men in the armed services still
receiving full pay from the Company should not get holiday pay but would get
holidays when they got back; that death in battle did not count as accidental
death in the company’s service for the purposes of the pension fund, and so on.
In 1917 they allowed women workers to sign co-partnership agreements.

A more important day to day role of the Committee was in the
reconciliation of grievances. Aggrieved parties were expected to take up their
problems with their foreman or to their Committee representative. If a dispute
could not be resolved through discussion and if it required a ruling on a
matter of principle it could then be taken for discussion to the whole
Committee. For example, whether Christmas bonus should be stopped if men reported
sick after Christmas and how to discover if post-Christmas sickness was genuine
illness.

A great deal of the Committee's work concerned disputes on
pension and welfare arrangements - in August 1911, for instance, they backed
the Company when compensation was not paid to an accident that
had remained unreported for some months, and in September 1916
they backed the Company when an accident had taken place ~. -
163 - while an employee was doing free-lance lighterage work. Often these
rulings involved issues of principle. In February 1914 in ~ response to a
special case they ruled that a bonus could be paid by post if an employee
requested it; in April 1905 they ruled that youths under sixteen could be
admitted to the sick fund.

While Fay, writing in 1912 of an earlier period, could say
that 'topics such as wages and the cost of living would probably be ruled out
of order' by 1918 such matters were discussed by the committee -although
management attempted to rule them out of order. [Charles Carpenter. Industrial
co-operation LCA 1911/1921]. The First World War had given the Committee a
freer hand to discuss matters beyond the routine, and with Livesey and meetings
chaired by Charles Carpenter, Committee reports seem to indicate that the
Committee was more determined to discuss subjects that management would find controversial.
In May 1924, for instance, the Committee asked about wage rises.

As can be seen from the Company’s policy on accidents men
were encouraged to take decisions on their own working lives. This worked well,
for instance, when the Committee was taking a decision to root out
non-combatants in the First World War from the workforce, but rather less well
when wages were under discussion. It is too easy to imagine that the Committee was not in
agreement with management on their role - they were quick to establish their positions
should they imagine that trade unions might' supplant them. In August 1920 they
passed a resolution, in a period of union activity, that they alone represented
the workforce to management.

Men serving on the Committee had to have an investment of
£25 in Company stock and at least five years’ service. They would thus be men
with an investment in the Company who would be eager to re-inforce the system
and want a measure of power for themselves. It is naive to think, that
dissidents would have ever got in a position to be elected.

By 1900 the profit sharing scheme had become
'Co-partnership'. Employees had become 'partners' in that they could buy stock and
vote for their own employee directors.

As we have seen the idea of employee shareholders was not a new
one in South Met. By 1894 it became possible for employees to buy shares with
half of their invested bonus. This system 'gave the Company an opportunity to
institute a snakes and ladder like system of rewards and punishments. The
virtuous flourished in a world of house purchase while the improvident sank
into oblivion

In 1894 the employees
were offered the opportunity to have their bonus increased by l~% if they were
willing to have half their bonus invested in Company stock. A few small
amendments we~ made in 1898 to accommodate the worker director scheme and then,
in 1899, so that more men would invest those who had withdrawn all their bonus
over the past five years, rather than invest, were told that unless they
deposited a sum of money with the Company each week they would get no
withdrawable bonus in 1900. The amount they must save must equal a week’s wages
by June 1900. The bonus was raised to a standard percentage for both invested
and withdrawable parts and for most men it became obligatory to invest half in Company
stock. It was now forbidden to sell this stock. In 1910 a further measure even
forbade the withdrawal of the remaining ... free portion and all bonus was to
be invested. Withdrawals could only take place under very special circumstances
involving special permission and a weeks’ notice [BOT reports
1891 –1920].

In the early 1900s, the Company under the auspices of the Co-partnership
Committee set about purging from the Company those whose stock certificates had
not been deposited wisely. Not only was the Company's interest evoked but all
the respectable man's horror of pawnshops, publicans and money lenders.
'Co-partnership 30 Journal 8arried comparative figures from the various Company
works of numbers of those who had pawned their stock certificates: Bankside (a
very small station) had none, while Rotherhithe led the - 166 - way with 29% of certificates in pawn~
As they said, the Board was very disappointed to find that 14% of the Officers
visited pawnbrokers too. Other certificates had been used as down-payments on furniture
or as a guarantee to money lenders - some of them ex-employees using their
'nest eggs' to set up in brokerage.

Men 'were warned against pawn shops and obliged to produce
their certificates out of pawn. One man, it was reported, re-pawned his the
next day and was sacked. Workers ~~re np longer allowed to keep their
certificates themselves and they were obliged to leave them with the Company
for safe-keeping.

For those workmen who did not mind if their money was piling
up unseen in the Company's hands rewards followed. They not only ~ qualified
for the Co-partnership Committee and eventual employee directorships but they
had the opportunity to become property owners. The Company operated its own
Building Society (which still exists) into which members could pay money from
their own savings. This investment could be released together with their
Company stockholding to purchase a home.

Co-partnership
Journal comments on what it describes as 'rumours' that the newly built Corbett
estate in Lewisham was being reserved for gas workers. This estate, even in
1983, constitutes some of the highest quality terraced housing in the district.
The Company also provided rented flats and houses.

Emigration to the colonies was another approved reason for withdrawal.
Employees were also encouraged to make wills to leave their assets wisely. So
that no more money than was necessary left the Company's hands a loan system
was instituted so that employees tempted to ask for withdrawal in a domestic emergency
could borrow money at preferential rates and not touch their investment.
Livesey explained that the accumulation by the middle classes of capital had
built up both the class and the stock of capital a century earlier; now the
working classes 32 could do the same. [Co-Partnership Journal]

The total accumulation of capital in the hands of the
workers was not enough to give them a significant vote at Company meetings to
sway policy; in 1921 they were thought to have only about 7% of the total
shareholding. [BOT 1921]

Together with this system of rewards and punishments the
bonus continued to be paid, albeit in the form of unseen certificates. As the
price of gas rose various changes ensured a bonus in most years - in 1901 a
different base price was set when gas prices rose to ensure that a bonus would
be paid.

South Met. were very proud of the lack of restlessness among
workmen in years when the bonus was reduced. In the First World War it is not
surprising that patriotic workmen did not grumble when the bonus disappeared
for years at a time. Changing economic circumstances meant that the original
basis of the scheme was subject to constant changes after 1918.